Money plays a very important role in our lives and most of us wouldn't be able to survive without it. We also like to think that money has value which is only partly true. In reality money has no intrinsic or inherent value and the only reason we use it is because we give it value. In other words the money in your wallet is worthless paper.
Up until 1971 the United States used a monetary system known as the gold standard. That means that a country's currency or paper money has a value directly linked to gold. This also means that the government would exchange paper money for gold.
The system used by the United States today is called fiat money. Fiat money is money that has no inherent value which means it's not backed by a physical commodity such as gold or silver so it can't be redeemed in gold. Most modern paper currencies are fiat money.
To sum up, money has value because we give it value. In other words we want it because we know we can use it to get goods and services. It's also important for us to believe in the future value of money for if we didn't then the system wouldn't work.
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